2026-VIL-273-GSTAT-LCK
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SGST Tribunal

GST - Detention of goods in transit - Validity of documents produced after interception under Section 68 of the CGST Act, 2017 read with Rule 138 of the CGST Rules, 2017 - The conveyance of the Appellant transporter was intercepted - Driver produced transport documents relating to different suppliers and different commodities, none of which was physically found in the vehicle. The vehicle was found loaded with a large quantity of textile materials and readymade apparel for which no tax invoice, delivery challan or e-way bill was available. The Appellant contended that the booking clerk had handed over a wrong bundle of documents and subsequently produced tax invoices of registered suppliers matching the goods - Whether transport of goods accompanied by mismatched tax documents, followed by submission of invoices after detention without e-way bills, satisfies the requirements of Section 68 read with Rule 138 - HELD - Section 68 mandates that the person in charge of a conveyance must carry the prescribed documents, and the presence of valid documentation during actual transit is a strict requirement. The explanation of an accidental exchange of documents was an unsubstantiated oral statement, as the Appellant, a professional logistics firm, produced no transport manifest, dispatch logs, tracking data or registration details of the alleged second vehicle - The invoices submitted by email after the seizure cannot cure the illegal nature of the transit, since the law does not permit retrospective validation. The invoices were issued only to unregistered buyers with Aadhaar numbers and no e-way bill was generated for any of them. The documents were therefore artificially structured after detention - The requirements of Section 68 and Rule 138 were not satisfied - The penalty under Section 129(3) is upheld and the appeal is dismissed - Proceedings against transporter as a ‘person other than the owner’ under Section 129(1)(b) of the CGST Act, 2017 where the suppliers claimed ownership after detention - Whether the proper officer was justified in treating the Appellant as a person other than the owner and imposing penalty under Section 129(3) - HELD - The rejection of ownership by the Revenue was based on verifiable facts, namely that the cargo was completely unmanifested, the documents carried related to goods not found in the vehicle, and the invoices produced later had no e-way bills - At the time of interception no owner was identifiable for the recovered cargo. ‘Coming forward’ under Section 129(1)(b) means stepping forward with valid, pre-existing and compliant documents at the threshold of interception, and the contrary view would render Section 68 and Rule 138 a dead letter - The valuation adopted on objective parameters such as quality and prevalent wholesale market averages was a fair and sound mechanism - The proper officer committed no error in treating the Appellant under Section 129(1)(b).
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